Chapter 3-Company Marketing Strategy

CHAPTER 3:
COMPANY AND MARKETING STRATEGY

Partnering to Build Customer Engagement,
Value, and Relationships
Dr. Velan Kunjuraman
Copyright © 2016 Pearson Education, Inc.

Company and Marketing Strategy
McDonald’s
outstanding success
results from much
more than just
producing fast food.
The iconic company’s
strategy is to build
engagement and a
sense of community
with and between the
McDonald’s brand
and its customers.
Learning Objectives
• Objective 1: Explain company-wide strategic planning
and its four steps.
• Objective 2: Discuss how to design business portfolios

and develop growth strategies.
• Objective 3: Explain marketing’s role in strategic

planning and how marketing works with its partners to
create and deliver customer value.
Learning Objectives
•Objective 4: Describe the elements of a

customer value-driven marketing strategy and
mix, and the forces that influence it.
•Objective 5: List the marketing management

functions, including the elements of a marketing
plan, and discuss the importance of measuring
and managing marketing return on investment.

Learning Objective 1
• Explain company-wide strategic planning and its four

steps.
Company-Wide Strategic Planning: Defining
Marketing’s Role
- Strategic Planning
- Steps in Strategic Planning
- Defining a Market-Oriented Mission
- Setting Company Objectives and Goals

Company-Wide Strategic Planning
Strategic Planning
Strategic planning is the process of developing

and maintaining a strategic fit between the
organization’s goals and capabilities, and its
changing marketing opportunities.

Steps in Strategic Planning

Defining a Market-Oriented Mission
• The mission statement is the

organization’s purpose; what
it wants to accomplish in the
larger environment.

Setting Company Objectives and Goals
Business Marketing
objectives objectives
• Build profitable • Increase
customer market share
relationships • Create local
• Invest in partnerships
research • Increase
• Improve profits promotion

Setting Company Objectives and Goals
Heinz’s overall objective is

to build profitable customer
relationships by developing
foods “superior in quality,
taste, nutrition, and
convenience” that embrace
its nutrition and wellness
mission.
H.J. Heinz Company

•Discuss how to design business portfolios and
develop growth strategies.
Designing the Business Portfolio

• Analyzing the Current Business Portfolio
- Growth-share matrix
• Strategies for Growth and Downsizing
- Product/market expansion grid

The business portfolio is the collection of

businesses and products that make up the
company.
Portfolio analysis is a major activity in
strategic planning whereby management
evaluates the products and businesses that
make up the company.

Strategic business units can be a

•Company division
•Product line within a division
•Single product or brand

Analyzing the Current Business Portfolio
Identify strategic business units

(SBUs)
Assess the attractiveness of its

various SBUs
Decide how much support

each SBU deserves

Growth-share matrix is a portfolio-planning

method that evaluates a company’s SBUs in
terms of market growth rate and relative
market share.

The Boston
Consulting
Group
Approach
FIGURE 2.2 The BCG Growth-Share Matrix

Problems with Matrix Approaches
• Difficulty in defining SBUs and measuring market

share and growth
• Time consuming
• Expensive
• Focus on current businesses, not future planning

Developing Strategies for Growth and Downsizing
Product/market expansion grid looks at new products,

existing products, new markets, and existing markets
for company growth opportunities.

Existing New
products products
Existing
markets
New
markets
FIGURE 2.3 The Product/Market Expansion Grid


Downsizing is when a company must prune,

harvest, or divest businesses that are
unprofitable or that no longer fit the
strategy.

• Explain marketing’s role in strategic planning and

how marketing works with its partners to create
and deliver customer value.
Planning Marketing: Partnering to Build Customer

Relationships
- Partnering with Other Company Departments
- Partnering with Others in the Marketing System

Planning Marketing: Partnering to Build
Customer Relationships
Partnering with Other Company Departments
Value chain is a series of departments that carry

out value-creating activities to design, produce,
market, deliver, and support a firm’s products.

Partnering with Other Company Departments

Partnering with Others in the Marketing System

Value delivery network is made up of the
company, suppliers, distributors, and ultimately
customers who partner with each other to
improve performance of the entire system.

• Describe the elements of a customer value-driven

marketing strategy and mix and the forces that
influence it.
Marketing Strategy and the Marketing Mix
-Customer Value-Driven Marketing Strategy
-Developing an Integrated Marketing Mix


Customer Value-Driven Marketing Strategy
Marketing strategy is the marketing logic by

which the company hopes to create customer
value and achieve profitable customer
relationships.

Market segmentation is the division of a market into
distinct groups of buyers who have different needs,
characteristics, or behaviors and who might require
separate products or marketing mixes.
Market segment is a group of consumers who

respond in a similar way to a given set of marketing
efforts.

Market targeting is the process of evaluating each

market segment’s attractiveness and selecting one
or more segments to enter.
Market positioning is the arranging for a product to

occupy a clear, distinctive, and desirable place
relative to competing products in the minds of
target consumers.
Differentiation begins the positioning process.

Positioning: The 100-year-old

Del Monte brand positions
itself as “Bursting with Life:
Made in America. Picked and
packed at the peak of ripeness.
Same essential ingredients as
fresh.”
- Del Monte Corporation

Developing an Integrated Marketing Mix
Marketing mix is the set of controllable, tactical

marketing tools—product, price, place, and
promotion—that the firm blends to produce the
response it wants in the target market.

Developing an Integrated Marketing Mix

• List the marketing management functions, including the

elements of a marketing plan, and discuss the importance
of measuring and managing marketing return on
investment.
Managing the Marketing Effort

Measuring and Managing Return on Marketing
Investment

Marketing Analysis

Marketing Analysis – SWOT Analysis
Internal
External
Positive Negative

Market Planning—Parts of a Marketing Plan
Executive Marketing Threats and

summary situation opportunities
Objectives and Marketing

issues Action programs
strategy
Budgets Controls

Marketing Implementation
•Turning marketing strategies and plans into

marketing actions to accomplish strategic
marketing objectives
• Addresses who, where, when, and how

Marketing Department Organization
Functional
Geographic
Product management
Market
Customer management

Marketing Control
•Evaluating results
•Taking corrective action
•Operating control
•Strategic control

Measuring and Managing
Return on Marketing Investment
Return on Marketing Investment (Marketing ROI)

• Net return from a marketing investment divided by
the costs of the marketing investment
• Measurement of the profits generated by investments

in marketing activities

Measuring and Managing
Return on Marketing Investment

THANK YOU…

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CHAPTER 3:

COMPANY AND MARKETING STRATEGY

Dr. Velan Kunjuraman

Copyright © 2016 Pearson Education, Inc.

• Objective 2: Discuss how to design business portfolios

• Objective 3: Explain marketing’s role in strategic

•Objective 4: Describe the elements of a

•Objective 5: List the marketing management

Copyright © 2016 Pearson Education, Inc.

• Explain company-wide strategic planning and its four

Copyright © 2016 Pearson Education, Inc.

Strategic planning is the process of developing

Copyright © 2016 Pearson Education, Inc.

Steps in Strategic Planning

Copyright © 2016 Pearson Education, Inc.

• The mission statement is the

Copyright © 2016 Pearson Education, Inc.

Setting Company Objectives and Goals

Copyright © 2016 Pearson Education, Inc.

Heinz’s overall objective is

H.J. Heinz Company

Copyright © 2016 Pearson Education, Inc.

Designing the Business Portfolio

Copyright © 2016 Pearson Education, Inc.

The business portfolio is the collection of

Copyright © 2016 Pearson Education, Inc.

Strategic business units can be a

Copyright © 2016 Pearson Education, Inc.

Analyzing the Current Business Portfolio

Identify strategic business units

Assess the attractiveness of its

Decide how much support

Copyright © 2016 Pearson Education, Inc.

Analyzing the Current Business Portfolio

Growth-share matrix is a portfolio-planning

Copyright © 2016 Pearson Education, Inc.

FIGURE 2.2 The BCG Growth-Share Matrix

Copyright © 2016 Pearson Education, Inc.

• Difficulty in defining SBUs and measuring market

Copyright © 2016 Pearson Education, Inc.

Developing Strategies for Growth and Downsizing

Product/market expansion grid looks at new products,

Copyright © 2016 Pearson Education, Inc.

Developing Strategies for Growth and Downsizing

FIGURE 2.3 The Product/Market Expansion Grid

Copyright © 2016 Pearson Education, Inc.

Copyright © 2016 Pearson Education, Inc.

Developing Strategies for Growth and Downsizing

Downsizing is when a company must prune,

Copyright © 2016 Pearson Education, Inc.

• Explain marketing’s role in strategic planning and

Planning Marketing: Partnering to Build Customer

Copyright © 2016 Pearson Education, Inc.

Value chain is a series of departments that carry

Copyright © 2016 Pearson Education, Inc.

Copyright © 2016 Pearson Education, Inc.

Partnering with Others in the Marketing System

Copyright © 2016 Pearson Education, Inc.

• Describe the elements of a customer value-driven

Copyright © 2016 Pearson Education, Inc.

Copyright © 2016 Pearson Education, Inc.

Customer Value-Driven Marketing Strategy

Marketing strategy is the marketing logic by